[Click eStock] "SK Hynix, Product Price Increase Phase... Operating Profit Expected to Approach 10 Trillion Won This Year"

DRAM Prices Rise Faster and Sharper Than Expected
Surge in Demand for IT Devices Like PCs and Smartphones
US Micron Stock Undervalued Compared to Peers... Potential for Increase↑

[Asia Economy Reporter Minwoo Lee] SK Hynix is expected to achieve an operating profit close to 10 trillion won this year. This is because the demand for IT devices such as PCs and smartphones is expected to significantly exceed forecasts, leading to a continued rise in DRAM prices.

On the 2nd, Eugene Investment & Securities projected SK Hynix's operating profit for this year at 9.679 trillion won. This is an upward revision of about 1.7 trillion won (approximately 21%) from the previous estimate of 8.002 trillion won.

They focused on the rise in the average selling price (ASP) of DRAM, as demand for IT devices such as PCs and smartphones is surging. Researcher Seungwoo Lee of Eugene Investment & Securities stated, "Although there is a base effect, the PC shipment growth rate in the first quarter reached an extraordinary level of 30-40% compared to the same period last year, indicating an unusual market demand situation," adding, "On the other hand, major suppliers are less prepared for this situation." This analysis suggests that the semiconductor industry, expected to boom, is improving faster and more significantly than anticipated.

Eugene Investment & Securities forecasted that SK Hynix will record sales of 8.277 trillion won and an operating profit of 1.234 trillion won in the first quarter of this year. These figures represent increases of 15% and 54.3%, respectively, compared to the same period last year. Compared to the previous quarter, sales and operating profit are expected to rise by 4% and 27.7%, respectively. Researcher Lee explained, "The increase in DRAM ASP is larger than expected, and the profitability of the 8-inch foundry business will also improve compared to the previous quarter," adding, "Operating profit in the second quarter is expected to increase to the 2 trillion won range, and in the second half of the year, quarterly operating profit is projected to reach the 3 trillion won range."

Against this backdrop, Eugene Investment & Securities maintained a 'Buy' investment rating on SK Hynix and raised the target stock price by 13.3% to 170,000 won. Researcher Lee explained, "The memory market centered on DRAM is recovering, and despite SK Hynix's superior performance compared to the U.S. company Micron, SK Hynix's market capitalization remains at only 89% of Micron's," adding, "We can expect a positive outlook for the stock price movement going forward."